Before this little "global financial crisis" hit, it used to be that you paid a hefty premium to buy rapidly growing Chinese companies. As of the beginning of this year, PetroChina traded for 16 times earnings, and China Mobile -- another China bellwether -- traded for 35 times earnings.

Those were relatively expensive valuations compared to their developed-market peers -- at the same time, Chevron (NYSE:CVX) and Hess (NYSE:HES) were trading for 11 and 14 times earnings, and BT (NYSE:BT), Telefonica (NYSE:TEF), and Vodafone (NYSE:VOD) were trading for 14 times, 15 times, and 18 times normalized earnings, respectively.

The Chinese names, however, deserved higher multiples because they had -- and continue to have -- much greater growth prospects.

Fast-forward to now
Checking back today, we see that PetroChina and China Mobile now trade for 8 times and 13 times earnings, respectively. That compares to 6 for Chevron, 5 for Hess, 7 for BT, and 11 for Telefonica, and 12 for Vodafone.

In other words, those same Chinese companies that once commanded heavy premiums are now similarly priced and in some cases cheaper than their slow-to-no-growing developed-market peers. Of course, that makes sense if you believe that China's economy is going to fare worse than our own over the next 12 to 24 to 96 months.

But it's not.

Here's why                                            
One of the major long-term trends in China is growing affluence in an emerging consumer class. These spenders have more discretionary income than ever before and now number some 300 million -- the size of the entire U.S. population! What's more, that market of 300 million spenders is growing rapidly as some 18 million Chinese migrate to the cities each year to get higher-paying jobs.

The Chinese government also has an enormous surplus of capital to spend on economic-stimulation projects, whereas we have an enormous deficit. Put it all together, and you can see that China's companies will continue to be the fastest-growing in the world. Yet they've gotten substantially cheaper.

That's where your opportunity as an investor lies.

Buy the next ...
When our Motley Fool Global Gains team traveled to China in 2007, we came home with lots of photographs, but not a lot of investable ideas. That's because the stocks were expensive.

Today, however, while the long-term macroeconomic picture remains intact in China, the stocks are cheap -- and cheaper than stocks here in the U.S.

That's why we're now recommending top Chinese names to our Global Gains subscribers and encouraging all of our members to take advantage of current volatility to build a portfolio with exposure to China on the cheap.

If you're interested in taking a look at the service and our recommendations and reading about more ways to profit from China's incredible growth, check out Global Gains free for 30 days. Click here for more information.

This article was first published on June 26, 2007. It has been updated.

Tim Hanson owns no shares of any company mentioned. The Fool's disclosure policy also awaits a Chinese counterpart.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.